PepsiCo invests $35 million in Closed Loop Local Recycling Fund

PepsiCo's Cedar Rapids plant. CREDIT RICHARD PRATT

PepsiCo Beverages North America (PBNA) has announced a $35 million investment with Closed Loop Partners that will create the “Closed Loop Local Recycling Fund,” an innovative circular economy initiative to advance new small-scale, modular recycling systems in communities across the United States.

The fund aims to increase recycling in areas with no or limited access to recycling, reducing waste and unlocking a new supply of recycled plastic (rPET), among other valuable materials, to support PepsiCo’s pep+ (PepsiCo Positive) sustainable packaging goals.

“As companies – including PepsiCo – set ambitious goals to use more recycled content in their packaging, there is more need than ever for partnerships and investments to increase recycling in the U.S.,” said Jason Blake, senior vice president and chief sustainability officer at PepsiCo Beverages North America. “We need to develop the infrastructure that makes recycling available to more Americans so we can recover the high-quality material that can be used in our packaging. Through pep+, our end-to-end strategic transformation, sustainability is at the heart of everything we do. As the exclusive investor in the Closed Loop Local Recycling Fund, we are actively driving the changes needed to transform the US recycling system and move towards a circular economy.”

Closed Loop Partners will use the investment to deploy small-scale modular Materials Recovery Facilities (MRFs) in underserved communities that currently lack access to larger municipal MRFs. This gap in access is typically due to a lack of funding or geographic proximity to facilities that process the materials.

The smaller, local MRFs lay the groundwork for the future of recycling, introducing a new way to meet and adapt to the various needs of communities across the U.S. These modular recycling systems are smaller and less capital intensive than traditional large-scale recycling facilities, reducing the need for the costly transportation of recycled materials to larger MRFs outside of the area.

The small-scale MRFs will help recapture valuable recyclables – paper, plastic, glass, and metals – reducing waste sent to landfill and unlocking a new supply of recycled materials. Each individual system creates the capacity to recycle at least 8,000 tons per year of materials, including keeping 400 tons of rPET in circulation every year. They are also expected to yield higher quality plastic while also reducing the costs and greenhouse gas emissions associated with the longer distance transportation of the materials.

This investment reinforces PepsiCo’s desire to create a world where packaging never becomes waste and to increase recycling rates in the United States. It aims to support PepsiCo’s goal to cut virgin plastic from non-renewable sources across our food and beverage portfolios by 50% by 2030.

“This first-of-a-kind investment from PepsiCo ushers in a new future for local recycling, empowering communities across rural America and small cities to reduce waste and harness the value of their recycled commodities,” said Ron Gonen, founder & CEO of Closed Loop Partners. “By closing the loop on these commodities, which can then re-enter local manufacturing supply chains, we are better equipping communities with the tools needed for resilience against a globally changing climate, while also creating new revenue opportunities and jobs. We look forward to continuing our long-standing partnership with PepsiCo to build and strengthen circular supply chains.”

This announcement comes on the heels of a $15 million PBNA investment in Closed Loop Partners’ Leadership Fund, a private equity fund that seeks to acquire and grow companies, including those in the packaging value chain, to strengthen recycling infrastructure and build circular supply chains that keep materials out of landfills.

These investments are part of a long history of PepsiCo partnering with Closed Loop Partners to make strides on material recovery and infrastructure advancements:

  • In 2021, PepsiCo became a founding partner of Closed Loop Partners’ Composting Consortium, managed by their Center for the Circular Economy. The Consortium brings together leading voices in the composting ecosystem in the United States to identify the best path forward and pilot industry-wide solutions to increase the recovery of compostable food packaging and drive toward circular outcomes.
  • In 2014, PepsiCo became a founding member of the Closed Loop Infrastructure Fund, which has provided investments that cities, counties, and businesses in the U.S. use to take the steps necessary to move recycling to the next level, including new trucks for pick-up/hauling and cutting-edge technology to make materials recovery facilities work more efficiently.
  • Through American Beverage’s Every Bottle Back Initiative, PepsiCo is an investor in Closed Loop Partners’ Beverage Fund, which seeks to improve the collection of the industry’s valuable plastic bottles so they can be made into new bottles using rPET. This fund partners with other beverage companies, as well as nonprofits and NGOs like The Recycling Partnership and WWF to reduce their plastic footprints, improve recycling access, provide education to residents, and modernize recycling infrastructure in communities across the country.

As the Closed Loop Local Recycling Fund begins investing in community recycling, municipalities across the U.S., as well as local haulers, can reach out to Closed Loop Partners if they are interested in exploring a small-scale, modular MRF in their community.